NSE Extends Trading Hours Till 5 PM For Interest Rate Derivatives From Tomorrow

Zerodha CEO Nithin Kamath said the extension of trading hours could "potentially lead to lower participation and liquidity in the longer run".

National Stock Exchange extended trading hours for interest rate derivatives to 5 pm effective February 23.

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National Stock Exchange on Tuesday extended trading hours for interest rate derivatives to 5 pm effective February 23.  The move aims at converging the trading window of interest rate derivatives with underlying market timings, it said.

"To converge with underlying market timings, members are requested changes in trading timings of Interest Rate Derivative contracts," said the stock exchange in a statement. It means that contracts for the expiry month of February will be available for trading till 5 pm on expiry day i.e. February 23. There shall be no change in trading hours for other interest-rate derivative contracts. 

All existing expiry contracts with expiry days beyond February 23, 2023 and all new expiration contracts introduced thereafter shall be made available for trading till 5 pm on the expiry day. 

"There shall be no change in CP Code modification/ Give up timings and same will continue till 5:30 pm. There shall be no change in Final Settlement Price computation mechanism i.e. it will be calculated based on the last 2 hours of VWAP of NDS OM trades subject to minimum of 5 trades," the NSE added.

At present, the domestic indices are open between 9:15 am and 3:30 pm. It is observed that markets with longer trading hours tend to hedge the risk better arising due to global information flow.

Zerodha CEO Nithin Kamath on Monday said the extension of trading hours could "potentially lead to lower participation and liquidity in the longer run".

"I'm unsure how it will affect the mental health of active retail F&O traders in the long term. Tracking P&L (profit and loss) for long hours is stressful & can affect life outside trading. While it could boost revenues for the capital markets business in the short term, I'm unsure if retail investors will end up doing better. This could then potentially lead to lower participation and liquidity in the longer run, which will affect everyone," Kamath stated in a series of tweets.

Extended trading hours for F&O will maybe signal the maturity of our markets. They also level the playing field for domestic traders against international traders and are also good for capital markets businesses in terms of revenues, but I'm conflicted. 1/3

— Nithin Kamath (@Nithin0dha) February 20, 2023